Krugman: How many banks? (4 March 2009)

But are we really thinking about thousands of banks? Here's Martin Wolf, today:

The four biggest US commercial banks - JPMorgan Chase, Citigroup, Bank of America and Wells Fargo - possess 64 per cent of the assets of US commercial banks (see chart) [chart not available online]. If creditors of these businesses cannot suffer significant losses, this is not much of a market economy.

So as far as this discussion is concerned, we've got, like, four banks. The "thousands of banks" line is just a diversion.

Not only was it a diversion, but it was wrong that "thousands of banks" couldn't be handled.

By laying out pros and cons we risk inducing people to join the debate, and losing control of a process that only we fully understand. - Alan Greenspan